FILE - In this March 31, 2015 photo, the wake of a supply vessel heading towards a working platform crosses over an oil sheen drifting from the site of the former Taylor Energy oil rig in the Gulf of Mexico, off the coast of Louisiana. Taylor Energy, who has failed to stop a 13-year-old oil leak in the Gulf of Mexico, is asking for more time to negotiate a settlement that could allow it to recover millions of dollars it set aside for work to end the leak. A court filing Thursday, Nov. 2, 2017, says Taylor Energy Co. representatives and U.S. officials have met four times in the past year to discuss possible terms of a settlement that would resolve its lawsuit against the federal government. (AP Photo/Gerald Herbert, File)

Settlement talks continue in suit over 13-year-old oil leak

By MICHAEL KUNZELMAN

Nov. 02, 2017

BATON ROUGE, La. (AP) — A company that has failed to stop a 13-year-old oil leak in the Gulf of Mexico is asking for more time to negotiate a settlement that could allow it to recover millions of dollars it set aside for work to end the leak.

A court filing Thursday says Taylor Energy Co. representatives and U.S. officials have met four times in the past year to discuss possible terms of a settlement that would resolve the company's lawsuit against the federal government.

The results of recent surveys and scientific studies at the leak site could have an impact on settlement talks, the filing says.

U.S. Court of Federal Claims Judge Nancy Firestone agreed in May to temporarily suspend the lawsuit so talks could continue. She ordered the parties to provide an update this week. On Thursday, Justice Department attorneys joined the company in asking the judge for more time to negotiate.

New Orleans-based Taylor Energy sued in January 2016, claiming regulators violated a 2008 agreement requiring the company to deposit approximately $666 million in a trust to pay for leak response work. The company argued the government must return the remaining $432 million.

In its lawsuit, the company argued the 2008 trust agreement should be dissolved and the funds returned because it is "impossible" to meet its obligations under the agreement.

The leak began off Louisiana's coast after a Taylor Energy-owned oil platform toppled during Hurricane Ivan in 2004. Waves whipped up by Ivan triggered an underwater mudslide that buried a cluster of oil wells under treacherous mounds of sediment, preventing the company from using conventional techniques to plug its wells.

Taylor Energy has claimed nothing can be done to completely eliminate chronic sheens at the site. Regulators have warned that the leak could last a century or more if left unchecked.

The company has lobbied for years to recover at least a portion of the money remaining in its trust. But federal authorities rebuffed the company's settlement overtures in 2015 and ordered it to perform more work at the site.

Taylor Energy said in its lawsuit that it had spent more than $480 million on its efforts to stop the leak, with $234 million of that money coming from the trust.

Thursday's court filing says company and government officials met in December 2016, April, June and September to negotiate a settlement. Scott Angelle, director of the Interior Department's Bureau of Safety and Environmental Enforcement, attended the Sept. 26 meeting. Angelle served as an elected member of Louisiana's public utility regulatory board before joining the federal agency in May.

"The parties represent that they have had good faith substantive discussions so far, particularly with the personal involvement of (Angelle), but, at the same time, recognize that such discussions cannot continue indefinitely," the filing says.

Government scientists conducted a "series of studies" at the leak site early this year, and a report on those studies is nearing completion, according to the filing.

Regulators also used a "remotely operated vehicle" to conduct an underwater survey of the leak site in September. The government believes those survey results "will be useful in working towards an amicable solution," the filing says. Taylor has asked for another settlement meeting in early December, it adds.

A 2015 investigation by The Associated Press revealed evidence that the leak is worse than the company, or government, have publicly reported during their secretive response. Presented with AP's findings that year, the Coast Guard provided a new leak estimate that was about 20 times larger than one cited by the company in a 2014 court filing.

Using satellite images and Coast Guard pollution reports, West Virginia-based watchdog group SkyTruth estimated in 2015 that between 300,000 gallons (1.1 million liters) and 1.4 million gallons (5.3 million liters) of oil had spilled from the site since 2004.